Shinsei Bank rejects SBI's one-month tender offer extension

Shinsei Bank on Monday rebuffed a proposal from SBI Holdings Inc. to conditionally extend its unsolicited tender offer for the bank until November, saying again that it needs more time.

Shinsei said its proposed extension to Dec. 8 will give shareholders sufficient time to assess provided information so they can decide on whether to tender their shares. The bank is preparing to launch a defense against the hostile takeover bid launched in early September.

SBI, a major online financial group, is seeking to raise its stake in Shinsei from the current 20% to as high as 48%.

If the tender offer is successful, SBI wants to replace some or all of the current Shinsei management and chart a course toward the repayment of large debts the bank accrued during a public bailout.

The latest announcement came after SBI on Friday offered to extend the offer period until Nov. 24 from the initially set date of Oct. 25 if four conditions are met. Shinsei originally called for an extension until Dec. 8.

In setting the four conditions, SBI demanded that Shinsei refrain from trying to buy time by posing “low priority” questions.

SBI also urged the bank to guarantee it is permitted to exercise its voting rights at an extraordinary shareholders meeting where Shinsei plans to seek approval for its planned defense against the takeover.

Shinsei has dangled the threat of diluting SBI’s holdings with its plan to issue share warrants, or the right to receive shares, to current shareholders.

Shinsei said it “may inevitably” implement some of the defense measures if SBI does not extend the tender offer period and fails to submit a revised plan by Thursday at noon.

SBI has a goal of becoming the country’s fourth mega-bank after MUFG Bank, Sumitomo Mitsui Banking Corp. and Mizuho Bank.

The group has taken issue with Shinsei’s failure to repay public funds two decades after the injection of around ¥370 billion as part of the government bailout.